Meridian Petroleum (EPIC: MRP)

Assets and Key Events

The following assets and events are based on the "Activity Update" RNS released on 27th April 2006. Victory 1-21 (10% WI) Fluid is currently being removed from the well, however it is continuing to produce gas at a rate of 150 - 250 mcfgpd. The removal of fluid is expected to take between 30 - 45 days, following which production is anticipated to rise to approximately 1 mmcfpd. Calvin 36-1 (80% WI 67.5% NRI) The Calvin well had substantial gas shows (see "Calvin Well Commercial" RNS 24-01-06). The company has experienced some small hold ups in obtaining the appropriate personnel and equipment, and now anticipates completion and tie in within the next 30 days. Meridian is developing plans to re-enter the Calvin 5 # 31 well to test the Rodessa zone and potentially produce from either the Sligo Petit or Redessa zones. This should require minimal capital expenditure and is planned to commence after the completion of 36 # 1. Orion (100%) The company has recently signed a second 40 acre lease block with the land owner. Permitting is on going and drilling operations are set to begin at the end of the second quarter. Based on data from earlier wells, the asset is believed to contain around 2.7 billion cubic feet of recoverable gas (See "Orion Lease Signed" RNS 14-02-06). Milford 36 (25% WI) The company plans to utilize coiled tubing on the well bore and drill several lateral legs. Drilling activity is likely to commence towards the end of the second quarter. Hustler (80% WI) Meridian has acquired the Old South Royalty lease in the centre of a defined area for potential production from the Lower Tuscaloosa oil sands. In order to develop this position further, the company has commenced acquisition of seismic leases, with an option to drill in some 800 acres around the Old South Royalty lease. The company is finalising an agreement to shoot 3D seismic with a Houston based partner. Emery Hudson The company is currently reviewing the 3D seismic data with a view to a possible re-entry in the third quarter. Coal Bed Methane Meridian has identified a significant CBM project in the USA. The study is with the company's reserve engineers. Following the review, anticipated in the next few weeks, the company expects to lease an initial foot print in order to undertake a pilot project. Australia The company has conducted a detailed review. The analysis reported several distinct hydrocarbon indicators and two potentially significant reservoirs. The data and supporting study are being reviewed by Scott Pickford in the UK, and an opinion will be rendered shortly.

Research

You should always do your own research before investing in a company, and you should not rely on comments posted here or on other sites as a basis for your investment descisions. The following links may be useful: Meridian Petroleum Web Site     Recent company RNS announcements     Oil Barrel

From Oil Barrel.com

"Meridian Petroleum Plans Kitty Litter Solution To Bring Sour Gas Project In Michigan Onstream
Meridian Petroleum has added another 3 billion cubic feet of proved and probable reserves to its portfolio with the addition of the Orion sour gas field in Michigan in the US. The field is home to two wells that were drilled and produced at rates of between 2 and 4 million cubic feet per day during the late 1980s and early 1990s but were then shut-in because of the hydrogen sulphide content of the gas.

AIM-quoted Meridian has submitted a plan to the Michigan Department of Environment to get this gas deposit back into production. The plan, which has been accepted by the DoE, involves a single well and two sulphur treat towers, a facility that is expected to cost between US$1.25 and US$1.5 million.

This is not a huge amount of money given the size of the reserve, the fact its onshore and these are 2P reserves, chief executive Tony Mason told oilbarrel.com.

The sulphur treat towers, about 15 to 20 ft high, are filled with kitty litter type material, which extracts the unwanted gas so that clean gas flows into the pipeline. The end product is biodegradable. This is a neat solution, helped along by the fact the planned well site lies in old industrial ground next door to a major gas line. The project economics are also enhanced by reasonably rich condensate content of the gas, said Mason.

The company doesnt plan to re-enter the existing wells because their position is unsuitable for the sulphur treatment facility and the holes are of uncertain quality. The new well, which the company plans to drill in the second quarter when Michigan begins to thaw, will be directionally drilled, putting the well cost at around $500,000-$600,000. This is by no means a company-making project - Meridian expects the sustained flow rate to come in between 2-4 million cf/d like the previous wells - but it does add further near-term production to the companys portfolio.

The company has a number of these near-term production projects in the pipeline (and, unusually amongst its AIM peers, already enjoys production from its Emery Hudson property in Michigan). These include the Milford 36 project in Michigan, where the company is awaiting the arrival of sophisticated perforation equipment that it has used so successfully on the Calvin field, in order to bring this project to fruition.

The Calvin field is the current star performer in the portfolio, following the recent success of the 36-1 well, which flowed more than 1 million cf/d of condensate-rich gas from the Sligo Petit zone. Meridian hopes to get the field onstream shortly and then plans to re-enter an old well, 35-1, to target the Rodessa zone. It is also eying previously undrilled deeper zones on the field as well as seeking to add to its position in the Calvin area.

This is proving to be an interesting project and one that is back on track after the frustrating delays of last year. Meridian was not alone in being at the wrong end of the inevitable equipment shortages that are now a common feature of the booming North American market, particularly in the Gulf area, but investors proved impatient and unforgiving. 2005 was, admits Mason, a horrible year from that point of view.

The company isnt a one-country play. It is also active in South Australia, where it is keen to get to grips with the Dolores prospect in the Arrowie Basin once native title has been confirmed. The company has a 100 per cent working interest in the prospect, which is reckoned to hold around 125 bcf of gas and lies just 25 km from the existing Moomba-Adelaide gas line.

Meridian has reprocessed all the original stack data and old seismic lines and hopes to complete its analysis of the original seismic field tapes by mid-March.

Weve had an additional slew of data from the government in Australia, which has been really helpful, said Mason. What we are seeing looks like a pretty significant reservoir although were not sure how we handle it commercially.

It all adds up to an interesting low-to-medium risk exploration portfolio, with plenty of near-term production in train to make sure growth is underpinned by cashflows: sensible and boring in Masons words but one for those who dont have the appetite for the white-knuckle ride offered by some of AIMs wildcatting E&P stocks "

Those wishing to purchases should do so before 10 am when the market begins to wake up. Would expect heavy overseas buying when US opens. Several US broking houses will soon begin to cover this stock as primary assets are US based.

Thanks DT - I have just bought - bang on time - cheers

This stock is becoming very toppy indeed.Its sp already exceeds fair value for calvin without official news its come on line.!
Take into account placings at 10p 14p and its institutional shareholders running for the hills at 15pish and its failure to deliver upon its promises I think people need their heads examining paying the current asking price of 38p....absolute madness.

Case of punters being sucked-in, they will get burnt with MRP at these prices.

Reluctantly I feel you could be right. The price seems to have risen for the past 5 days, and beyond my own price target, so Calvin could well be factored in at these levels. I suspect a correction isn't too far away. As always though. Just my opinion.

Strawbs.

Far too overvalued...a correction is due with a steep drop

about to rally up, 2pm approaching, will it break 40p this time, err YES I DO THINK SO!!!

Looks like you might be right for a change PH !!

Just be careful girls/guys this is over valued and over bought when it drops it will be fast.Have a look at previous company announcements last year they were bringing Calvin on line by the end of the year to take full advantage of winter gas prices.We are still waiting for that even though it is still imminent,to date the company has been a serial dissapointer.
As for the current sp well no doubt as soon as the rns is released to confirm Calvin hook up there will be the usual mugs who buy in blind however to support the current sp the gas flow rate is going to have to be impressive .
As always dyor .

I have sold all mine now... 78% profit in 6 weeks, fairly happy about that

I suppose I should probably sell too. It's difficult though, as in my opinion the company seems to have pretty good prospects. Still, I held onto my CHP shares up until the primavera RNS, and that proved to be the wrong decision, so maybe I should! Arrrgggghhhh. Investing is so annoying sometimes.

Strawbs

still low mkt cap considering!. a fair rise and we will possibly see a pullback but i'm holding firm on these. saying that i would not be surprised if we see 50+p sooner rather than later.

What is MRP worth... It is worth in a Stock market, exactly what someone else is prepared to pay for it.

Fundamentals are very important, as I've oft said, but then there is hope value, potential etc.

Even if we computed exactly the value of assets, that does not equate to being the 'worth' of the company, which is why for so long many of us thought it was undervalued, albeit the market didn't, but where as seems to be happening with MRP the market wakes up to the 'value'! For the record I wasn't in at 7p. I think Ginger and others were here before me, so I don't pretend to have spotted this gem when they did.

Talk of 2 this year, yes of course it could be, but it could be x, y, z and noone with any certainly can tell you, although for me if its 1.20 next year, that still a pretty good rate of return, so whether its 1.20 today, tomorrow or next year to me...it's well worth the wait, and yes, it could be another Cairn. Cairn also started as a minnow.

Today's price can hardly be said to be dear, and I think some doubters who are perfectly entitled to have doubts, are doing so based on the price a few months ago, to the price today, whereas what they should focus on is what price the company floated at, and where we are now and on that basis, either it was far too dear at the outset, or else we are still too cheap now.

The market ultimately decides, and MRP is in a very unusual position of having several items likely to fall into place within the space of a few months, where virtually any one from 4 will enable MRP to go forward, acquire more assets and work more assets, let alone all of them succeeding.

Some suggest placings etc., but I don't really see what point a placing would have in MRP's arsenal, if cash will be available.

IN that event scrip issues are a more likely scenario for the future, if, as has been suggested more shares are needed 'because of institutional demand'.

From my point of view they can go sing for them! They have every opportunity of filling their orders in the market, and if by doing so it raises the sp, then so be it, as that is how the market should work...not preferential treatment for institutions who already get quite enough breaks.

What is so difficult to consider with MRP is that unlike companies who may only have one project to look forward to, with finely balanced chances of success, in MRP's situation, they have several projects, all of which have a very good chance of being profitable plays, so its then hardly surprising that the sp has increased, because you cannot now buy MRP just based on the next RNS, you have to consider All the other assets and the effect of ANY assets being on line, because that is where the real mileage for MRP comes into being.

Price of MRP 72 m shares in issue
38.25
Market Cap. [m]
24.52

Victoria oil: 100m shares in issue
201.00 -
Market Cap. [m]
200.99

you would have to think it is worth more than its float price high 52p. which imo was a total over valuation now as we are seeing the mkt is putting a fair value on the company total under valuation which should be over this mark imo.

It is starting to fall as the sp has gone up too quickly...still overvalued at 36p

we will see in 6 months!.

watch this rocket this afternoon

don't think so! ph. seems strange but pleased to see a drop.

hold for the long term!.